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reins. of course, no one could have predicted that just ten days after parker became ceo of america west the country would be devastated by the attack of september 11th. in the emotional and financial fallout of that tragic day, the airline industry came close to collapse. parker navigated america west through these difficult times. when the company urged -- merge with u.s. airways in 2005, parker took a new set of challenges on as the ceo of the newly restructured legacy alive. u.s. airways is a company built on mergers and acquisitions, which is a fitting for dug parker, the industry's main advocate for consolidation. he has argued time and again the airlines can be more flexible, more capable, and more valuable to travelers if they join forces . the airlines that did so are now operating successfully.
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mr. parker believes the combining u.s. airways and american airlines would create a more competitive industry and a more sustainable airline. so far his plan has received widespread support, including and, perhaps, surprisingly from the workers and american airlines and the union. he is here today to tell us more about the merger and where it sits and to his broader vision for the industry as a whole. ladies and gentlemen, please join me in welcoming dug parker to the national press club. [applause] >> thank you. thank you, all of you, it was very nice. i will say to my not a good poker player. herb is a particularly and uniquely bad one. he makes you look good. thanks again. this is a real honor to be here. i want to express my heartfelt thanks to the members of the
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national press club, their hospitality. this luncheon is a wonderful tradition, and we are honored to be a part of it. i want to start by thanking jimmy horowitz here on behalf of the transport workers union, instrumental in organizing the event. thank you. and i also want to stop right now and begin by extending my deep gratitude to the american airlines union leaders joining me here today, who probably had introduced. all here. it's been a pleasure working with all of you. i'm looking for to what our future has in store. thank you guys for being here. i am also thrilled to be here today in our nation's capital. this remand this town live at the absolute intersection of policy, business, media, and the public interest. i wanted to be here to discuss my view of the state of the industry and u.s. airways vision for our company's future. now, the level of media interest focus on our business continues
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to surprise me from time to time based on the size and revenue generated by our business, we have seen it generate to garner a disproportionate share of coverage. although, if you think about how many people and communities we impact perhaps it is not that surprising. the airline business is one of the most dynamic and challenging industries in the world, one of the most difficult to navigate given that so many pieces of our business are out of our control, from the impact of oil prices to weather patterns. although margins in the industry are known for being slim, small profits have a very large impact . in 2011, for example, the domestic airline industry added 10,000 jobs even though we may less than $300 million in total. we also serve over 780 million passengers traveling to and from within the united states accounting for roughly 5 percent of our national gdp and driving $1 trillion in global economic activity. today our industry provides a framework for 10 billion jobs.
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as economic growth is slowed airlines have adopted and assault. beginning in 2008 we focused on efficiently using capacity to meet demand, controlling costs, and maximizing service to destinations with the greatest amount. other airlines said taken similar action and at the same time legislators and regulators have sought to improve and preserve the health of our industry. i'm happy to report that the a for a board is working more respectably with washington to ensure safe and secure air transportation in to enable u.s. airlines to thrive well stimulate economic growth. it is true. our country needs a practical national airline policy to address these sentences in order to foster sustainable profitability, benefits for consumers, and additional jobs. we have a lot to show for our effort. policymakers have helped the industry take great strides in a more active regulatory environment. on that note i would like to thank congress thus secretary lahood, and faa administrator
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horton for their indulgence in making air travel the safest it's ever been. they're steadfast focus on safety is deeply appreciated shared by all. so now let me tell you a little bit about what's happening in our company. the team of u.s. airways and happy to reporters during a phenomenal job. our results and prospects have never been stronger. we are going to announce our second quarter results next week , whether we already disclose of we will have a very strong second quarter. based upon current business conditions we are expecting a very strong year 2012. producing record revenues to a record yields, very strong load factors and keeping our unit costs down and the flying a great airline. so far this year we set new records in nearly every operating metric measure. that is in an airline that has led the network or the last five years in the key customer reliability metrics like on-time performance and baggage handling the credit for all success goes to the 30,000 -- 32,000 hard-working people of u.s. air
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wis. doing a fantastic job of taking care of our customers, and i cannot thank them enough. it's the responsibility for our management team to ensure ridge everything that we can to support those people and make u.s. airways a stronger second possibly be. you might ask, if u.s. airways is doing so well on its own bodies and so much time and energy talking about mergers? why not jazz just keep doing what you're doing so well with an independent airline? first of all, for the first time we ever mentioned the benefits of mergers we have always said, there is no need for u.s. air wis to participate, and that is mostly the case today. just because are doing well independently and have a model that works well, that does not mean we should now work to make the model even stronger. we ask each of our team members to continually raise the bar and make sure we do the same. we owe it to them and their other stakeholders to make our airline not destroy inviable but as strong and competitive as it impossibly be. that is where mergers
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commission. carter said been used to great effect by united, continental, delta, southwest, and america west u.s. airwaves. all four combined airlines provide better now works that are not profitable. by combining complementary networks to provide more attractive and efficient service its -- service mergers have led to increased traffic, cost reductions, and vigorous competition. u.s. air wis is a prime example of this. oil prices of the senate does 11 is there were in 2008. our focus on offering consumers more choices in how and where they travel as well as on our own internal costs help you as their western and $800 million loss in 2008 to $100 million profit in 2011. the benefits of this trend the stand way past the bottom line. there are real advantages to combining airlines for employees, customers, and communities. employers will benefit from greater job security and more long-term a virginities. if they're working for a successful airline.
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customers would get more flight options that better times to more places. whenever to airlines combined they open the communities that they serve to many more travelers. i no american airlines very well. in fact, i got my start there in the mid 80's. american is still a great airline with the powerful brand and great people, including the senior management team led by my friend, tom gordon. it is not the largest airline in the world anymore or anything close to it. in mergers of unit of continental and delta and northwest, two airlines with much better develop drug networks than american. so finally late last year after watching the airline revenue share get eroded by these new, more attractive networks and unable to get its own cost structure in line with its revenue generating capabilities, america resorted to bankruptcy -- american resorted to bankruptcy. while i've never worked for company in bankruptcy, i've seen enough in this business to know
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what airlines can and cannot accomplish in the process. first of bankruptcy does allow airlines to either negotiate new contracts with their labor unions or impose even worse terms upon their employers. it also allows a debtor to allot to -- it also allows a debtor to avoid repaying. negotiator terminate contracts such as air or leases. all these have significant financial advantages. airlines can emerge from bankruptcy with lower operating costs and lower debt and astral nearly as much as they had before it filed. bankruptcy cannot fix a revenue problem. specifically, the bankruptcy process cannot repair a structural network problem like the one american airlines has today. american cannot fix those numbered efficiencies through organic growth either. americans now work weakness and the consequent revenue challenges can only be fixed through a merger and only through a merger with u.s. air wis. let me explain. in the five years before it filed bankruptcy american airlines slipped from the one of
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the top three domestic airlines in the east, west, and central regions of the united states to being ranked no better than fourth in any of those regions to date. americans cornerstone strategy is focused on five large cities rather than creating a comprehensive route network. it only exacerbates the problem. as it does not address the number deficiences of american purses' united and delta. simply put, america has hubs to the american has hubs to connect people around the united states and strong international gateways in both jfk and miami. very strong route network, but that leaves a large : the network up and down the east coast. that means american cannot easily surf the popular and highly lucrative east coast region which causes it to miss out on enormous sources of corporate business as well as consumers to travel and unleased a seaboard. the breast and scale of the new united and delta is no longer
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the case. america as -- american is still losing corporate share to the larger competitors and it will never be able to gain it back without a comparable network. a combination with u.s. airways would create such a network. we took a long, hard look at american, and we know that together we can build the greatest ally in the world, an airline that can compete more effectively with the networks united, delta, and others. together american and u.s. airways can connect more communities to provide greater benefits for americans, creditors, and u.s. airway shareholders than either airline could do on a stand-alone basis. furthermore, we would also save thousand jobs and offer better compensation and long term cities for the employees of both airlines. our networks charge from the complementary, very little overlap, and thus the need to scale back a service that either airline currently offers. with u.s. airways network added american will be able to connect travelers to their destination using a much more efficient and practical system of runs. for instance, instead of trying
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to convince travelers in buffalo to fly anywhere on the east coast tour throughout the southeast -- throughout the southeast by connection in chicago which is something customers simply want to, the new american will be able to connect those passengers to philadelphia, washington d.c., or charlotte and provide convincing connecting a virginities up and down the east coast. a more comprehensive route network would provide communities across the united states which you will come to rely on major carrier service for the economic well-being. the combined airline would maintain all its present focus cities, so inhabitants' would continue to reap the benefits of having a major domestic airline as a next door neighbor. in addition, the cities throughout the country that have limited connectivity to other u.s. airways or american was start have been the -- would suddenly have many more travel options. american is in fourth or fifth place in all major regions of the united states. a merger with u.s. airways would bring the combined airline into a much better competitive
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region. first and the east coast, the largest and most lucrative. first in the central region, and third on the west coast. such an out going network could appeal to customers and allow the new american to once again compete with the title of world's leading airlines. something employers have been lane for for very long time. you don't need to take my word for all of this. in our industry there are enormous pit amounts of data regarding airline performance including routes flown got pricing and profitability, all of which are filed with government agencies. all of this publicly available data has been exhaustively analyzed seeking to compare and evaluate the different options available. every single independent analyst on wall street and elsewhere has taken the time to go through that date and learn the facts, decided that emerging -- merging with u.s. harris is the best interest. moreover, almost all animals to
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look at the date that have concluded that it won't solve america's network problem. american's employees and their advisers have come to the same conclusion as evidenced by their presence here today. evidence of the financial creditor support is found in trading prices of americans unsecured bonds which we are trading around $0.20 per dollar prior to the news of u.s. airways interest in entering a never $0.60. so if a merger would benefit consumers, creating more competitive industry and do all these nice things for employees and creditors, why is it not happening? i can tell you from our own experience with mergers, we have learned that timing is everything. we believe the best course for all stakeholders is to affect the merger with american during the process from a financial perspective, chapter 11 congeal american from the transactional expenses that it would incur in a post bankruptcy merger
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scenario. it offers a better environment to work out details like flea optimization, ig contracts, credit arrangements command facility issues. from an internal perspective, effecting a merger during bankruptcy will find more benefits to employees. furthermore, the employees' support a merger between our two airlines during bankruptcy, and that really matters, especially in the customer service business. lastly, u.s. airways is here now , and we are ready to do this now. that is not -- there is no guarantee that will be the case for ever. american got itself in this situation, in part, because they were singularly focused on fixing their internal issues. they assumed the outside world would stand by while they did. that was in the case, and it very well may not be the case in the future. we believe the time for action is now. as part of the earlier commitment to merger protocol last week american announced its plan to of open merger talks with interested parties in the
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near future. we are pleased with this development because we hope it means we will finally get the chance to present our plan and a fair and balanced process. we also believe it is more important than ever to ensure the process is, indeed, fair, transparent, and credible. all that we want is a fair chance to present our plan and compared dollars in the process, it does not disadvantage in the of the options. it determines the best plan based upon what is best for the owners of amr who are its creditors. we understand there may be as many as four other airlines included in this merger, and we welcome the competition. we are certain that any objective analysis will conclude that the best plan for the creditors, employees, customers of american is a merger with us airways during the bankruptcy process. now, before i close, excuse me, i want to take a moment to talk about the american airlines' labor leaders who are here today representing over 55,000 american employees.
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in the story american sells about its bankruptcy filing the company free labor unions are the offenders. selfishly obtaining excessive wages and benefits at the expense of the company's long-term prospects. over the past few months i have had the great fortune to work with the leaders of all three of these unions, and i can tell you these people have acted in the best interest of their members and also in the best interest of american airlines of the long-term. they have done so with tremendous foresight, wisdom, and professionalism. the decision by these labor leaders to come out and support a merger was an unprecedented move on their part, and i think it is one of the great untold stories of this process a far. some people improperly characterized their support as being driven by u.s. airways willingness to pay their members more. as they will tell you, the gap between our proposals and america's proposals is not very large. the support is not driven by short-term needs, but rather, by the fact that they have taken the time to study a long-term strategic interest to the underpinnings of its plan.
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they have hired advisers to help them, and they have listened and their lead. in the end, they support this merger because they understand the best thing for their members is as strong, competitive merged airline with a long-term strategic advantage. the employees of american airlines are lucky to have these sort thinking leaders representing them, and a bribe to be working with them. thank you, david. thank you, laura. thank you, john. so now, in closing, some of you may know i am a big fan of bob dylan. as sometimes throw his lyrics and to some of my speeches, so i will do it again. as i think about this process and where we are the lyric that comes to mind is you don't need a weatherman to know which way the wind blows. what he meant was, there are some things you just know. you can spend a lot of time to enter a lot of analysis, listening to the pros and cons, wait for more permission, but that's just complicates the situation. you get tied up in the process and lucite. you don't need. you don't need all of that to tell you what you already know.
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this is one of those cases. you already know what the right answer is. everyone on wall street does. the employees of american airlines and usair was no. the creditors watching the bond prices know it. the median as it. now the public is no. that is where you are common. either way, i heard theresa say that the media can't applaud. feel free to apply the time you want. [laughter] the public has a lot invested in the outcome, which reads as a major stake in america's process. please hold every wednesday to the fire in the situation as it unfolds. ask the tough questions and demand freelancers. cut through the noise and the process and get to the substance don't wait for the weatherman to tell you what you already know. there are 100,000 jobs at stake here. the fate should not be set -- decided in the dark.
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thank you very much. i know would like to open the floor for questions. i would be delighted to take tough questions and give real answers. [applause] >> how can u.s. airways enter into another merger when it has yet to integrate the employee groups in the last one in 2005. >> can i have a different question? [laughter] i'm happy to answer that one. that is actually one of the easy ones. indeed, we still are working through integration issues with the american west u.s. airways pilots. the problem there, without boring everyone in the room, is seniority integration issue which has, unfortunately, resulted in litigation and is tied up in federal court. once that is resolved we will have this in your lead to us in your list that will allow us to get this stylus to move to a contract. it is what it is. we are running the airline is generally well, and hope to have
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that resolved, and it has to go through a court process. the nice thing about this merger is, since the time we closed the u.s. airways america west transaction there has been some better legislation passed. and that law now requires that if, indeed, the unions from two separate airlines in a merger, they need to go to binding arbitration. once that binding arbitration is complete, that is the list. it's federal law. so had that been in place back when we get a merger with u.s. air with america west would not still have this problem. if we do this merger with american, that will be the process by which we are governed and what actually resolve this problem. that is not the reason we wanted the merger. we will get this result of our own if we need to, but it is one of the best benefits of that. >> why are any of u.s. airways union representatives here today? >> because they're all hard work
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working to represent u.s. airways. the situation is this. we, at this point, had to go cut -- had to go workout transactions and agreements with three. we have not had to do so with the u. s airways. i assure you, if we get to the point where we are merging the airlines, you will have the u.s. airwaves leader standing shoulder to shoulder with these as a support. >> what are you doing to work out other issues of your flight attendants in their contracts? >> our flight attendants, we did reach 85 with the negotiating committee, we reach an agreement the members rejected it. we hope yields a result the kinnear ratified. the negotiations actually are happening today. and so we are highly optimistic that we can get that done before we get this merger done. >> will you guarantee u.s. airway employees' seniority?
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>> this is a process, as we well learned, that is left to the unions to determine. indeed, what i know is the labor leaders here understand what a big issue this is and they will make sure that the process that takes place is fair to all employees, and a highly confident about that. and not the least bit concerned about how that process will be managed. >> historically, employee groups and airline mergers have suffered as management and executives have prospered. why would this proposed merger be any different? >> well, i'm not sure i take up the premise, but what i can tell you about this merger is that, again, as evidenced by the support of the labor unions to today, it's differ the employees of both airlines. when that will provide for both companies, the ability to have an airline that has job security that we cannot, another airline can provide today. a starter live that allows for
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more just security. the fact that the two networks are able to produce revenues than either could produce to get a -- together by combining those revenues and allows us to pay more. all those things are great for the employees of both companies. that's why we have the employees support? >> other than the creditors to else has committed to your approach to an alternative to american airlines stand-alone plan? >> again, as i noted in my remarks, everyone that we have talked to supports this one was the take the time to learn the facts. as to the actual credit committee itself, those that are comprised, we have not had the opportunity yet to present to the creditors' committee. when we do i am certain we will have that in our favor so long as we have a fair process. >> according to the new york times, tom horton stands to make 60 million if he is ceo of american way emerges from bankruptcy. do you think that is why they're fighting a merger with usa
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waste? >> the -- let's see. i find it noteworthy that the only opposition that seems to exist to this merger is the senior management at american. you know, again, we have full support to my employees support. we don't have the support of the american airlines senior management team. i don't want to guess as to why it is they don't support it, but we are hopeful that we can get their support at some point in the future. >> will you seek antitrust approval for a merger before the end of the year? >> we would like to. that is part of the process that i keep referring to. this -- we have done a tremendous amount of work looking at this combination from a regulatory perspective. did not anticipate there would be any regulatory issue, but
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they're is a formal process that must be followed. we need america's participation. so we are hopeful that the process that we still have not seen yet, but have been told exists, well, -- it will include filing said that to happen in a timely manner so that we are on equal footing at the stand-alone plan in terms of tiny. >> should the merger proceeds will would u.s. airways objects to any possible antitrust review divestiture requirements that bites focus on dca or its other have been focused cities? >> again, we have done -- this is a matter of review endo believe the combined airlines would require any sort of divestitures in order to receive doj approval. we will wait for that process to unfold and see if doj agrees. certainly, the work that we have done with our advisers would indicate that that investor would be required. >> the american pilots will soon
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be voting on a tentative agreement with american. how does a yes or no vote by the pilot impact this situation for u.s. air? >> yes. this one we struggle with a little bit. the reality is, it is up to the pilots of american to decide. i have found that of other now my e-mail address. i hear from a lot of them. many of whom are asking just that question, what they want to know is, if we ratify it will that get as close of the merger? that is what they're being told. i don't want to speak for david and settle the mess up his process of telling you we're being told. they are hearing from their advisers that it is the right thing to do if they want to get to a merger, which they do, to ratify a contract with american. that has come as you might imagine, a little bit of cognitive dissonance -- descanted -- cutting the dissidents in it. maybe that is hard to understand , but the reality is,
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and we have talked to restructuring advisers, we did the same thing. american and the creditors' community have made it quite clear to the process that the merger process will follow these labor contracts being put in place. so actually agreeing with american and putting a process in place on the stand alone should bring us closer to getting a merger done. so i believe, again, we this for david to talk about, but that is our understanding. indeed, ratification would be good for the merger. that is why most of the american employees are leaning toward ratification because they believe is best for a merger. >> you attribute american's current state of network deficiency, yet what does distinguish american most is the fact that it maintains the highest labor costs in the industry. given that fact, one specific facts provide assurance that the cycle will be repeated the your accommodation american union demands?
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>> thank you for the question. i'm glad someone asked it because i should have mentioned this more. in fairness to the people in this room and the people they represent, the american -- the u.s. airways proposal is significantly concessionary verses where the american employees were prior to bankruptcy. so, you know, it does a disservice to the people of american to suggest that they are not getting a lot in this transaction because, indeed, they're getting more than anyone else. the contracts that we have offered to the american employees are only better than the context that the even more concessionary contract unamerican has offered. ..
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let me talk a little bit about u.s. airways model. i referenced trademarks. all the things you said about america than it deficiencies can be said about u.s. airways is somewhat true. we do you dig u.s. airways has a network even smaller than american and therefore has less revenue-generating band delta, where we do two things. one thing is we folks are flying on places where we truly have a competitive advantage. we're the number one carrier in each of our hubs.
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charlotte, phoenix, philadelphia. we are the largest carrier and that gives us an advantage. we took some places where we do well. that is .1, somewhat different than america. .2 is we do have a lower cost. you can't have a revenue disadvantage and have the same cost structure. it's happened a lot of times in the business is. we understand that and people understand that. what we do instead is have an airline that has lower costs that can match. we into tears at. we have to do that. our employees know that. were always at full information about what we can and can't do in that model works well in the model can work forever. the good news is there is a lot of mood for increases in u.s. airways over the long term. that doesn't mean it can't be a great place to work. but by merging the two airlines,
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the argument goes way and that's why it's so good because it allows us to get to higher wages >> is a merger in necessity to stay afloat? to your employees megamerger for a secure u.s. airways feature? >> absolutely not. we will lose this better that i can say it. we are doing extremely well on a standalone basis. within the smallest of the four since their merger in 2005. we are much smaller than united and delta, but we produce results that are as good or better because of the model i just described and we keep doing that forever. >> what would a combined u.s. airways and america fleet look like considering the massive fleet order last year? >> yeah guess is that's you route networks are so nicely complementary, we need all the airplanes from both sleeves food
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look much like americans, what should be a new fleet that america has put in place. we would of course honor because we need those airplanes as america needs them. >> what step is your airline take to better compete with foreign competition? >> well, ariel airline been u.s. airways, doing what i said i'm sticking to where we have a competitive advantage and do that well. fine and out of our a and doing so very well. this combined airline could do much better. the threat with foreign competition is real and what we should all be worried about in terms of commercial aviation because there are others that have much bigger advantage is that we do because they really do have national aviation policies in their countries and it should be a concern for all of us. but this new airline would be much better equipped to be in either american airlines or u.s. airways would be allowed.
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>> what are your views on american consolidation on the regional level? >> less strategic. frankly be on a couple of regional airlines so i don't little bit about it, but there are indeed may be more regional airlines than one would expect there to be at this point in time. the chunk at the same same benefits of consolidation because the regionals for the most part flight in and out of network supporting the larger network carriers so you don't get the kind of network consolidation of benefits you would. >> what is your view of the 50 seat flying in airways regional theater and what is the future of the 50 seat market? >> sound like one of our pilots on this one. who i know are here. hi, guys. representing our regional carriers.
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anyway, we ate u.s. airways have a couple of contracts without saying suppliers. some of them were done to save the old u.s. airways before we arrived. as are contracts we need to abide by. if i can tear them up and start over we wouldn't have as many 50 seaters. we don't have that luxury, nor do we want it. we're quite happy with what we have now, but the reality is we have more than what we buy. with lake larger jets in overtime will do that for right now will keep the ones we have. >> would be the impact of a merger in ticket prices? >> well, ticket prices -- ticket prices are hard to project, but i don't think the merger effect would have positive or negative. for the most part we compete with united and delta and southwest would be competing against the exact same group of airlines. what i knows it would create a
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third competitor, united and delta, those two airlines again i can't stress enough how the networks they have created have created two u.s.-based global carriers into alliances frankly that are stronger than anything else. on this merger would create a third competitor to town that is just as big an alliance they compete. i think we have to start putting one that much stronger. it's good for competition to create a third airline that those two large airlines. >> will that help eliminate luggage trees? will there be more layoffs? and will there be more seeds on planes? were getting to the meat. >> returned that one and? what we do to get ourselves as well as get a better job of charging services and some customers want in our church and those who want. package fees is one of those it's a huge fundamental change
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in our business model, one the industry never put in place, but one that makes sense. the reality is that those of you who avail ourselves of the services of handing her back to life and happiness a nice handbag to you at the end of the trip require an infrastructure than those who carried it back on themselves. think about when you check in now today because the technology advances, the only reason there's airline real estate outside of security is to to check-in baggage. we would meet any of that space or employees or people didn't check baggage. not suggesting that won't or shouldn't. i'm suggesting is if you do there's a cost and those who do it showed. that includes ballots, people running baggage in between airplanes. it all exists for that service in the service has a large cost in a huge amount of capital in the baggage fees seek to charge those who want to use and not charge those who want to do it and i think it's a better model. again, we have a lot of customer
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feedback yet it's not our goal to do things that alienate customers, but i do believe we certainly have a better customer acceptance. it keeps us all the way it should work as a competitive business. we've chosen to do it and i think again it's the right model for the business today. >> by charging customers the luggage fees that drives or to bring things onto the airplane, creating congestion. what is your solution to that? >> you didn't even read a card. if that's your question? [laughter] i can see where this is going. yeah, look, indeed when you charge for people to check bags, they will. they try to figure out ways to get bags down to the airplane that maybe don't fit on the airplane. you know, again, we will try and fix that problem other than charging people to get down
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there because that creates new sets of issues. we need to work very hard to try and make sure people understand that to try and check bags they can't actually fit man and tran check them in advance and pay those fees. we work hard if an airline to make sure when those situations occur in people get down to the gate with bags that are too large that we accommodate them. but the real goal would be to figure out when they'll be down there people stopped by security. >> you could charge them a double fee and then you have to accommodate. >> how much outsourcing of jobs goes into the u.s. airline industry? >> i don't know that i know the answer to that question. there is certainly some amount of work that is not done entirely by airline employees. i know that. on that note i'm happy to report we at u.s. airlines in the last year brought in all of our reservations that have been
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outsourced at the time of the bankruptcy. we acting today have some of our reservation agents the hill with members of congress talking about that event, which were very proud of. we now have 100% of their reservations being done by u.s. airways employees in the united states and were really happy about that result over the course of the last year. >> how much inspection of foreign-made cards take place at the safety carriers enter us-made cars better? >> yack any work done outside of the united states is regulated by the faa and by the same systems. there's no concert nor should anyone have any concern that worked on it outside for payers is any standard lower than the united states. >> how has the three-hour tarmac delay will affect airline operations and you think it's fair? the >> i think the three-hour tarmac
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rule is a great example of what happens when we in the business don't do a good job of taking care of our customers. i can tell you that if we go through the data, the reality is that there will probably is worse for customers and better. there probably are cancellations that occurred that wouldn't have before because we have to bring the airplane back. but that is not the point. the point is that if the line now and it is a law because we as an industry to a horrible job in several cases of taking care of our customers and there were long delays. and when you do that come you get legislation. the message to us and the businesses we should not do things like that or we'll get more legislation. we are committed to do things every day with an attitude that is in favor of the customers so we don't get ourselves in these circumstances. the three-hour tarmac rule is something forced upon us because we didn't do things right ourselves and that is what will happen in the future for the constraint in the future.
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>> should the u.s. relaxed restriction on foreign ownership of airlines? why or why not? >> we don't have a real strong position on this at u.s. airways because i don't think that makes a large difference in the business. from a free-market perspective, i think certainly there could be a case made for why you have these restrictions. they don't seem to make a lot of a lot of market sense and i'd be hard-pressed to argue that there is some sort of national defense concern of having a foreign ownership of u.s. carriers. so from that perspective you could make a strong argument that they shouldn't exist. having said that, relax and that would not have the major impact on our business. i don't think there's a shortfall of capital the united states. anyone with a good business model can get financing. furthermore, at least right now, the majority of the labor unions
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are concerned because they're concerned about whether it's a job. we can figure it together is something that makes sense and upon happen anyway. again, it is one that i do believe is hard to argue from a free-market perspective, and also one we have in place now. >> what is the most important thing federal government can do or not do to help u.s. airway further airlines today? >> just let us compete. ideally, lower taxes. i'm sure you're all aware of this, by 20% or more of what you pay on the ticket goes to taxes and fees. it would be nice of you all had to pay less than that. that is the case today, so i'll give you a two-part answer. i'll be pragmatic and suggested
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probably won't happen in the near-term. so instead, what we would ask is just please don't raise those taxes and please don't do things that make it harder for us to compete. this is a business that is hard enough as it is than one that we all struggle to make even modest promises. but a large part of that problem is because of government regulation and government intervention and not allowing airlines to completely cut their businesses. we just asked for the opportunity to compete. don't raise tax burden. lower if you can then put in place policies that recognize that it makes sense as other businesses and provides others the opportunity. >> is u.s. airways predicted a political backlash from hub cities like philadelphia or pittsburgh quite >> absolutely not, because it's good for other cities we fly to
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today. we would combine the two route networks, fly to other cities are currently fly and the hudson and maintain in the citizens and customers in the committees that were serviced more cities and that's one of the great things about it. >> as you said in your speech, he began working with tom horton. if some of this merger battle personal? >> what are you laughing about? >> no, absolutely not. none of his personal. tom and i are friends and have been friends for a long time. hopefully we'll remain friends. right now we have a disagreement about what is best for u.s. airways. if the business disagreement, not personal. what it's about from my perspective is 100,000 jobs and doing the best we can for those 100,000 people. i don't think any individual or
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small group of individual should get in the way of that. we don't plan to them adopting the american airwaves should get underway. i'm not suggesting that's what they're doing, but what i think we should do is have a fair and open process to show the best thing to come forward and be put in place. i'm confident if we do that we will find is the best plan for the merger with u.s. airways and come at this point disagrees with that. >> you are currently in negotiations with the union. how can you bargain in good faith would accord other unions from another airline? >> well, we are indeed in negotiations with a number of employees of negotiations taking place in good faith is really slow will with the assertion will be a stand-alone airplane we will get them resolved under those premises. nothing about that has changed. those negotiations in those
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terms would be if none of this is going on and we'll get the contracts that those people on those terms. now, the better question is how are those negotiations affected if you're the merger? but nothing about the contracts being negotiated artifact name but the fact we happen to be pursuing this merger. >> of the merger goes through a couple she take american headquarters out of fort worth? >> we would not. if indeed they emerge, headquarters would remain what they are and fort worth. we are well aware of the fact that the other two airlines, the stronger brand, the american brand, as i said because i've been there myself -- i love that brand. i know it's a great airline and
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can be a great airline again. it can be a great brand for the company and furthermore happen to believe an airline named american airlines should be headquartered in fort worth, so that is where it will be. >> at the merger goes through, will you stay in the star alliance? >> we would not. u.s. airways would move. it's one of the nice things about the merger that happens. u.s. airways standalone is extremely happy to be in the star alliance. we believe in it and were very happy, but these combined airlines would move the u.s. airways revenues, the 13 billion in revenues into one world that would have a nice balancing effect for the three alliances. one world has fallen behind, much like americans. and so by moving u.s. airways, you create much more balanced
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alliance, which is why willie walsh yesterday in this town made positive comments about the murder as well -- merger as well. >> as you just said, willie walsh said it was an aggressive strategy that put this merger on the table. what is your plan b if this doesn't work? >> well, we are highly hopeful that the process has been laid out, which i don't know we haven't seen, but the process we understand exists is the right process and they won't need be a plan b, but the process that comes forward out of american will indeed provide a fair and level playing field for all proposals to be reviewed and we couldn't be more confident in that case our proposal would prevail. so that's where we expect to go. i don't like to speculate what happens if that doesn't happen. i'll play about speculation in
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this case is from the time we started this, people have been telling us this hasn't been done before. there is no playbook. indeed if we find that price as doesn't go the way we hope it does, we'll call another audible. again come 100,000 jobs at stake here. that is too important to let a small group of people decided shouldn't happen. so we'll do what we need to get it done. >> so if american airlines emerges as a standalone, you think 100,000 people -- jobs will be at stake? >> that's not what the card says. >> airways. >> i'm reading the card over her shoulder and said nothing like that. but i'm happy to answer that question. here's what i believe, between the two companies. here's what i know, there's a hundred thousand employees and i
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believe what is best for those hundred thousand people is to work and they can compete with northwest and delta. i am not suggesting that if america goes standalone, those 100,000 jobs go away. i certainly don't think i would be the case. but what i know with those 100,000 people will be working, much as they have since 2001 with less security about their future, less ability for progression in their careers, less ability to be paid as much as the people at united and delta. all of those things to happen. and indeed over time there will be fewer jobs. again i'm not trying to suggest that it doesn't go away. 100,000 people are worse off if we don't do this merger than if we do. >> you spoke of the airlines of the customer service business. have you ever try to reach a live person by: u.s. airways center companies number. and if you don't have that, i've got it right here.
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[laughter] >> let's try it. i'm not going to call it in fear it may not work. i'm certain i'd get a live person. here's the answer to this question, teresa, which is the large number of phone calls going to many airlines reservation system do not require talking to a live person. so the system is set up in a very friendly way, we believe come with a lot of research by a lot of people to navigate those callers who do not need to tack to a person, to an individual, to have their problem taking care of two anatomy of process that allows us to keep our costs down and provide better customer service to those who need to talk to an agent. that is why when you first: you'll find yourself talking to someone who is not a live human gene. although they sound pretty much like one.
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but that is the reason that programming exists. >> is there a price zero option? >> is hard to find. >> before we get to the last question. were almost out of time. before we ask the last question, i have a couple announcements to make. our upcoming speakers on july 20 we have.dirt toby cosgrove. we'll discuss health care policy in the wake of the supreme court historic affordable care act ruling. on july 24, judy woodruff and gwen eiffel coanchors the "pbs newshour" 2012 will discuss the complex issues that are in play into the run-up to november 6 general election. on august 28, general james amos, commandant of the u.s. marine corps was discuss the response course. secondly and most importantly like to present our guest with our traditional npc maag.
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>> thank you very much. [applause] >> when will he wickett peanuts back on u.s. air flights and will really get to see movies on u.s. domestic flights? >> you can watch any movie you want on your ipod or their personal devices, which most of our customers prefer to the movie that i watched on the competitor's flight last night. [laughter] [inaudible] >> yeah, and inconvenience. it was research. but anyway, the fact of the matter is this, there is a lot if you'll tied up in all of those -- and everything that goes into having movies on board. the movies that aren't on board, customers don't watch anymore. people bring their own personal entertainment that is better than what airlines provide. it is a complete waste of your
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fair to give you a movie that you don't want to watch and charging for it, which is what would happen. so we don't plan on doing. >> so we should bring our own? >> tenets. i don't know the peanut answer. we have a problem with peanut allergies. we found pretzels are easier. >> the olympics are coming up. is this good for the airline, even if it isn't for rough around? -- for rough around? >> it depends who wins. it's an event that drives a lot of traffic in and out of the city, but generally not a lot of trips. they come a long time and people that will be traveling on business decide there's no way they're going during the olympics. so it's not necessarily the best thing for an airline to have the olympics or even a convention in your hub. we are happy to be having the
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democratic convention in the charlotte hub, but please don't update your model to assume will make a lot of our money. people flying in and stay for a lifetime, so others avoid it. we are not complaining, but it does not have a huge amount of impact on the revenue. >> how about a huge round of applause for a speaker. [applause] at like to thank the national press club staff, including journalism institute a broadcast center for organizing today's event and finally, a reminder you can find more information about the national press club at her website at www.press.org. thank you and we are adjourned. [inaudible conversations]
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[inaudible conversations] >> it was about those men and women who are almost mortally injured and more, because at the huge advances that have been made in medical trauma treatment over the last 10 years, now they're been saved. an incredible number been saved. i must everybody who falls in the battlefield is being saved. i wanted to write about what life was like for these people. i've really started with a question had been seen some people who were pretty, pretty
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gruesomely named, wouldn't it be better off if they were dead? don't they wish that they were dead? >> something has happened in the last two 22 decades that are changing the corporations and that is the fact that the cycle time, the amount of time they have to stay on the top of the pack has been incredibly comprised by globalization, by technology shares current regulatory shares. in fact, large corporations, but now need to do with existing markets and on customers and products.
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they need to deal with disruption. and disruption is when they have a great core business and some crazy comes along and says, we are going to take out this company. the best examples of this year or two of the smartest companies. anybody ever have a blackberry? orono pfl? i was in finland, talking to someone who is at the gnocchi a board meeting the month the iphone came out. they passed a copy of the iphone came out at the board meeting and the pseudo-quote was, why should we care about this?
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